Fred the Shred: the irresistible rise and rise of a ruthless charmer

Fred 'the Shred' Goodwin, the Royal Bank of Scotland's 44-year-old chief executive, is cursed with a nickname that was first conferred on him when he went through a cost-cutting period as head of the Clydesdale and Yorkshire banks.

The ribbing continued after RBS's takeover of NatWest, which led to the loss of 18,000 staff in one of the largest rounds of cost-cutting in an industry that is used to branch closures and mass redundancies.

But Goodwin is a sociable character who can be as charming as he can be ruthless. He plays golf and likes restoring vintage cars - it once took him three years to restore a 1972 Triumph Stag. 'He is a very meticulous individual,' says a friend.

These days, however, he doesn't have much time for either restoring old bangers or playing golf. In the world of banking, it is never wise to relax for long.

Inside the organisation, Goodwin is feared and admired in equal measure. 'He is not someone you want to get on the wrong side of,' says one insider. 'He sometimes gives the impression of being able to eat grown men for breakfast.'

While he can be tough with people within the bank, brokers describe him as suave and friendly, and always willing to sit down and explain the nuts and bolts of a business.

In the City, that can be a rare gift, as executives are usually rushed and hassled, 'but Fred can be amazingly patient', says an investment banker.

Guests have pointed to the hospitality laid on by Goodwin at lunches at the bank's Edinburgh headquarters. But he is far from being a show-off: 'In fact, he comes over as a modest individual with a wry sense of humour', says a colleague.

Goodwin and chairman George Mathewson get on particularly well, which is lucky, as Mathewson can be outspoken at times.

Goodwin attended Paisley Grammar School, not renowned for its soft approach to life, and Glasgow University.

He trained as an accountant, and was employed as an auditor at Touche Ross, where he soon found himself in charge of the worldwide liquidation of the Bank of Credit and Commerce International in 1991.

Later, he rose to the top of Clydesdale Bank in less than a year, which amazed competitors and fellow directors alike.

Before that he was an executive of aircraft manufacturers Short Brothers in Northern Ireland.

Sometimes Goodwin courts controversy. In an interview with the American financial magazine Bloomberg Money Markets, he said that people abroad associate Scotland with 'whisky, tartan, bagpipes, and golf'. Therefore, Goodwin said, the bank wanted to catch the eye of non-British shareholders by renaming the bank RBS in some corporate advertising in the US. But the bank said the idea of dropping Scotland from the company's name was 'ludicrous'.

Nevertheless, new advertising campaigns in the US - where the Royal Bank's Citizens subsidiary is based - emphasise RBS more prominently than Royal Bank of Scotland.

Goodwin, like countless other chief executives, has faced shareholder ire over his remuneration package.

He has become the highest-paid boss of all the major high street banks, having won a huge pay rise in 2002. The reward reflected a 12 per cent increase in group profits and a 15 per cent jump in the dividend. Goodwin's salary was split between £832,000 in base pay, a £1.73 million performance bonus, and £15,000 of benefits. He also received options over shares potentially worth £900,000.

The company points out that under Goodwin, the bank has risen to become the fifth largest in the world, overtaking JP Morgan and Deutsche Bank.